Thoughts on nationalisation

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This is the month of freedom for both Zimbabwe and South Africa for in this month both countries were born almost 31 and 17 years ago respectively.

At birth, both countries inherited a distorted economic base characterised by a dualistic economic existence in which the majority black population was excluded by law from participating in the mainstream economy.

The colonial/apartheid system was at its core a capitalist system underpinned by an unjust constitutional and undemocratic order and unacceptable political and economic morality.

The national question that arose after raising the independence flag necessarily had to deal with the role of the state in the national democratic revolution.

This question is not unique for developing states like Zimbabwe but has often been asked by even the developed states suggesting that it is in the national interest that this matter be exhaustively debated so that consensus is established on the society that should be created to serve the needs of the people who choose to live in it.

The ideology of economic nationalism is a universal phenomenon Zimbabwe ought to bring to its people, so it has often been argued.

Pregnant in such arguments is the notion that Zimbabwe belongs only to its sons and daughters who were prejudiced by a colonial history to the extent that it is then argued that they cannot assert their rights in the contractual market without the assistance of the state.

In the ascendancy to power, the first rung of the ladder had to be the political office in which state power is vested.

Those who had the privilege of occupying state offices naturally felt they had the custodial obligation to address the negative effects of colonialism.

The relationship between the black majority and economic assets was not a healthy one during the colonial order.

The absence of black role models in the economic landscape has had the unintended consequence of psychologically conditioning in the minds of the majority the notion that the state can and should be both a referee and player in the enterprise of nation building.

However, rarely are the capacity and competence issues raised and openly debated. An assumption is often made that the state can do no wrong.

Nationalisation being the process of altering or assumption of control or ownership of private property by the state has often been used as the instrument for addressing the unintended consequences of capitalism.

Whatever system is adopted, it is obvious that the purpose of the state ought to be to serve the interests of the people who choose to be part of it.

The social contract that forms part of any enterprise of nation building is constructed on voluntary transactions.

Does nationalisation therefore, produce superior economic outcomes to those offered by private solutions? State and local authorities have traditionally taken property for public purposes such as the construction of roads, dams or other public utilities.

The undisputed role of the state is that of a residual investor and more significantly of a player that only intervenes where the opportunities offered by the market end.

The state as a competitor to private initiative offers its own challenges, risks and opportunities.

The state is entitled by statute to collect income from all income earners as tax and this privilege is not conferred on any other artificial person.

Why then would the state want to burden itself with the task of producing income when the state by law is entitled to a portion of all income earned?

The concept of nationalisation beyond the right of eminent domain usually reserved for the state is essentially a 20th century phenomenon and has largely been driven by interests of economic and social equity and largely by a resentment of foreign control of major national assets.

The history of nationalisation and its impact on efficiency and productivity has to be part of the body of knowledge that citizens must possess before blindly embracing approaches to nation building that have often proved to produce misery, brain drain and general welfare losses.

In accepting nationalisation as a remedy to an economic or commercial injury, one has to assume that the state by construction and the performance of its actors has the necessary incentive structures to sufficiently capture human imagination and inspire the kind of creativity often associated with free societies in which the viability of the state is inextricably linked to the generation of income by voluntary and uncoordinated economic agents.